A press release titled, "Ramirez Asset Management Launches Government Money Market Fund in Partnership with the Hispanic Scholarship Fund," says, "Ramirez Asset Management ('RAM') has expanded its partnership with the Hispanic Scholarship Fund ('HSF'), one of the nation's largest nonprofit organizations supporting Hispanic American higher education. RAM and HSF's expanded partnership is tied to the December 2023 launch of the Ramirez Government Money Market Fund (RAMXX). RAM will proudly donate 10 percent of the new fund’s net management revenues to HSF to further support Latino/a students with the knowledge, resources, and support needed to access higher education. RAMXX is unique in the money fund marketplace, as it is one of a few managed by a diverse investment firm. As of April 30, 2024, the Ramirez Government Money Market Fund had $271 million in total fund assets with several Fortune 500 companies as pioneer investors in the Fund and supporters of the next generation of diverse leaders."
Sam Ramirez Jr., President and Chief Executive Officer of RAM, comments, "Since our founding, support for the Hispanic community has been in our organizational DNA. The launch of this money market fund is an extension of our belief in the work of the Hispanic Scholarship Fund and its impact on the Hispanic community. As a firm, we are proud to expand our support of Hispanic youth through this initiative."
The release explains, "The Ramirez Government Money Market Fund is a traditional government money market fund invested in securities issued by the U.S. government, its agencies and instrumentalities, including repurchase agreements that are collateralized solely by U.S. government securities. At this time, the Fund is available for direct investment and is accessible via the leading cash management portals: ICD (Treasury First), JP Morgan (Morgan Money), US Bank (Cash Solutions) and Treasury Curve. RAM is diligently working to make the fund available on other cash portals in the near future."
It states, "As one of the nation’s leading nonprofit organizations supporting higher education, HSF supports more than 25,000 Scholars at over 1,200 colleges, universities, and graduate schools across the country. Since its founding in 1975, HSF has awarded over $790 million in scholarships and provides a broad range of programs and support services for students, parents, HSF Scholars, and HSF Alumni."
Fidel Vargas, Chief Executive Officer of HSF, adds, "We are excited to partner with Ramirez on this initiative and applaud the organization for its ongoing support of HSF and commitment to the Hispanic community. I am proud to highlight that 90+ cents of every dollar spent by HSF goes directly to Scholarships, Support Services, Career Services and Programs, and the funding from this initiative will be no different. This partnership will directly contribute to our ability to provide support services and scholarships to thousands of parents, students, and HSF Scholars across the country." For more, see our Jan. 3, 2024 Crane Data News: "Ramirez Asset Management Launches Government MMF; Federated on 24."
In other news, J.P. Morgan's most recent "Short-Term Market Outlook And Strategy" writes that, "Yes, T-bill demand should remain robust.” They comment, “While the outcome of the upcoming November election remains highly uncertain, the one thing we know is that the US fiscal deficit will remain large in the coming years, regardless of who wins. As our Treasury strategists note, given Treasury’s current net coupon borrowing capacity and their estimates of the budget deficit forecasts over the medium term, Treasury will likely remain underfunded in FY26 and beyond. And while it would make sense to finance the funding gap by increased coupon auction sizes, as the deficit is likely to be more structural than cyclical in nature, the minutes to the May refunding meeting interestingly revealed that some members of TBAC felt that the recommended 15-20% T-bill share of the market could be revisited at a later date, given market developments and continued robust demand in the years since the original recommendation. Reading between the lines, it appears there is a possibility that the T-bill share of the market could migrate above the current recommended range over time."
The piece continues, "If so, we believe the markets will have no issues digesting the additional T-bill supply, with demand remaining robust. Indeed, even as T-bill outstandings have grown by $2tn over the past year, the impact on T-bill/SOFR spreads has been marginal thanks to the available pool of liquidity at the ON RRP, underscoring the sheer amount of demand for T-bills in the current market environment.... Perhaps more importantly, when we look at the buyer base of the T-bill market, we see the demand from several key buyers remaining substantial, if not expanding, in the near term."
JPM says on "Money Market Funds," "As of March-end, government and prime MMFs accounted for $2.1tn, or 35%, of the T-bill buyer base, a dramatic 19%-pt increase year-over-year.... Given the growth in MMF balances in 2023 as well as YTD, particularly in government funds, it’s no surprise that MMFs contributed to the bulk of the uptake in net T-bill issuance over the past year. Currently, MMFs are the largest buyers of T-bills, and we suspect they will continue to maintain a large presence in this market, particularly as they should likely keep WAMs elevated heading into an easing cycle. Moreover, implementation of the 2023 MMF reforms this year will likely further the demand for T-bills going forward, as institutional prime funds are required to hold more daily and weekly liquidity and as certain funds decide to convert from prime to government."
On the "Federal Reserve," they tell us, "To the extent the Fed were to shift their SOMA portfolio to shorter maturities, this could also increase the Fed’s presence in the T-bill market, which currently stands at 3% as of March-end. Our Treasury strategists believe a shift towards the Fed holding more T-bills makes sense, as it not only reduces the volatility of the Fed’s remittances but will also more closely match the maturity profile of the Treasury market given the events of the past year. To be sure, the notion of holding more T-bills on the Fed’s balance sheet has some support within the FOMC, as both Governor Waller and Chair Powell have commented on it. If this comes to fruition, we believe the Fed would reinvest maturing Agency MBS into T-bills when QT concludes. This would result in approximately $180bn in T-bill demand from the SOMA (assuming MBS paydowns continue to run at approximately $15bn/month)."
Discussing "Stablecoin issuers," they state, "Though stablecoin issuers only own 1% of the T-bill market currently, they are poised to grow meaningfully in the future should a stablecoin legislation come to fruition. This will not only fuel the growth of existing stablecoin issuers, but also open the doors for new entrants into this space. At present, there seems to be bipartisan support in both the House (led by Maxine Waters (D-CA) and Patrick McHenry (R-NC)) and Senate (led by Cynthia Lummis (R-WY) and Kristin Gillibrand (D-NY)) to get a stablecoin legislation done this year. If passed, this could substantially strengthen stablecoin issuers’ demand for T-bills, as the coins need to be backed at least 1:1 by HQLA such as Treasuries."
Finally, they cite, "Berkshire," explaining, "It is well-known that Berkshire Hathaway keeps its excess cash mainly invested in T-bills. Over the years, their T-bill position has grown so large that, as of March-end, it owned $158bn in T-bills, comprising 3% of the market. Berkshire Hathaway currently holds more T-bills than international organizations, stablecoin issuers, offshore MMFs, or LGIPs. At Berkshire’s annual meeting, Warren Buffett noted a lack of investment opportunities and attractive cash yields as reasons that are driving their positions higher, and a continuation of these dynamics could easily push their cash pile to $200bn by the end of 2Q24, and perhaps even higher over the medium term."
JPM adds, "Currently, the T-bill share of total outstanding Treasury debt is already above the top end of the 15-20% range, and even under baseline assumptions, our Treasury strategists don’t see a decline to below 20% until late 2026. Until the need for more borrowing capacity emerges in mid- to late-2025, that share is unlikely to rise significantly higher than 22%, as it stands. That said, the good news is that when that time comes there are structural buyers ready to digest that supply."
